Q&A for Union Employers on Contract Negotiations and Workforce Reductions During the COVID-19 Pandemic

April 17, 2020
Inside HR
Employee & Labor Relations
Read time: 7 mins

Every organization has been disrupted by the impact of the COVID-19 pandemic and HR professionals have questions about the future of their workforces. Those in unionized settings are experiencing unique challenges when trying to balance business changes and collective bargaining agreements. MRA has compiled a list of the most common questions and answers we’ve been receiving to help members with unions during the COVID-19 pandemic.

Q: Our labor agreement has expired or will in the next few months. Should we begin negotiations?

A: All employers have been significantly impacted by this pandemic, some more than others. It might be the biggest shock to the economy since the passage of the National Labor Relations Act (NLRA) in 1935 during the Great Depression. The duration and future impact of this crisis is unknown so now is not a good time for most employers and unions to negotiate contractual terms and conditions of employment that will apply for the next five or three years, or perhaps even one year.

Most unions agree with this view and will agree to some type of extension to the current labor agreement. If the union insists on starting negotiations despite the current crisis, the employer should agree to some type of reasonable process and times, such as video conferencing (Federal Mediation and Conciliation Service currently offers assistance on this process) to avoid the claim of refusal to bargain and unfair labor practice charges. The employer’s proposals and response to union proposals will simply reflect the reality of the current situation, such as no change to current conditions, or possibly reductions, in a short term of agreement of perhaps one year. At this time, sessions might end up being discussions over how to keep the business afloat more than negotiations over a new labor agreement.

Q: The union has agreed to extend the current labor agreement and they drafted an extension agreement for us to sign. Should we sign it?

A: Ideally, the employer should draft the extension agreement, the way you want it to read, and send it to the union for signature. A simple extension would provide that the terms of the current agreement (including the no-strike clause) will continue until a given date, or expire sooner if the parties reach agreement and execute a new contract.

Another option is to extend the agreement indefinitely until the parties reach a new agreement or either party provides notice to the other of its desire to terminate the extension agreement, using an agreed upon notice period of 10, 14, or whatever number of days. The longer the notice period, the more notice the employer will have of a possible strike if the union exercises its right to terminate the extension.

A union-drafted extension agreement will likely include various conditions, including the guarantee that all wage and benefit increases in the new agreement will be retroactive to the first day following the expiration of the current agreement. This guarantee of retroactive increases should be avoided by employers, particularly now when it’s hard to know what wages and benefits might need to be negotiated down the road. Guaranteeing retroactive increases might make agreeing to any type of wage increase in the first year more difficult. Ideally, the effective date for changes to wages and benefits, and language changes should be addressed in the negotiations for the new labor agreement.

Q: The union says we should be providing our employees with “hazard pay.” Are we required to do so? If not, should we?

A: Unless the labor agreement has such provisions or a law is passed requiring “hazard pay,” you are not required to do so. Since pay is a mandatory subject of bargaining, you should notify the union of your desire to provide any such additional pay or benefits. The union is not likely to object or demand bargaining, but they will want to be informed in advanced.

If you do implement some type of increased pay or benefit during this crisis, it is important to communicate the reason(s) for the increase to employees and that it is temporary. Calling it something other than “hazard pay” is also recommended. You should also notify the union in writing that you are providing these increases on a non-precedent-setting basis and reserve the right to terminate the increases at your sole discretion.

Q: Can we reduce/increase hours of work and change schedules to adjust to the changing workload caused by this pandemic?

A: Work hours and schedules are normally addressed in the labor contract and such provisions must be followed unless changes are agreed to by the union. Some labor agreements have specific language, including management rights clauses, that permit the employer to make such changes without union approval or bargaining over the decision.

During this pandemic, employers can make a strong business case with the union to make a variety of adjustments to preserve current and future employment, and perhaps survival of the organization. Providing advance notice to the union of desired changes to hours and schedules is normally required.

Q: We have never had layoffs before and the existing labor contract language on this issue is unclear. What should we do?

A: Prior to the COVID-19 pandemic, many employers have not experienced the need for a layoff, particularly on a large scale. The language in labor agreements on layoffs and recalls may not have been reviewed or updated in contract negotiations for many years. Before any employee is laid-off or bumping starts, the employer needs to make sure that it follows any notice requirements specified in the labor agreement and is certain on how the process works under the labor agreement.

It is always a good idea to consult with the union before starting any layoffs to clarify the process on who, when, and how employees will be laid off, including any bumping rights. The grievance procedure is not the time to begin discussions with the union on layoff issues. The same goes for recall procedures. Mistakes in laying off and recalling employees can result in very expensive remedies.

Q: Is the NLRB still conducting union elections (including decertifications) and processing unfair labor practice charges?

A: Yes, to both. From March 19 to April 3, 2020, the National Labor Relations Board (NLRB) suspended all union elections over safety concerns with the coronavirus. Effective April 6, 2020, elections resumed with procedures adopted by the Regional Director for each location to help ensure safety. NLRB personnel are currently conducting business by teleworking.

Q: Our company is applying for a loan under the CARES Act. Is there anything about dealing with unions in the Act?

A: Yes. Deep in the fine print of the 880-page Act is the requirement that mid-sized employers, over 500 employees, applying for a loan must agree to the following:

  • The recipient will not abrogate existing collective bargaining agreements for the term of the loan and for two years after completing repayment of the loan; and
  • The recipient will remain neutral in any union organizing effort for the term of the loan.

The meaning of the first condition is unclear and wide open to interpretation. The meaning of the second condition is clear: get a loan and be prepared for union activity because your ability to respond to a union organizing campaign is severely limited. Unfortunately, these union concerns are likely irrelevant to mid-sized firms in desperate need of a loan to survive. Hopefully, the Department of the Treasury will provide guidance on these provisions and clarify the role of the NLRB, the federal agency normally responsible for administering labor law.

Q: Our company is considering applying for a shared work program with our state in order to avoid layoffs. Do we need to involve our union(s)?

A: If the program will involve any employees covered by a collective bargaining agreement, you will need to involve the union that represents those employees. Establishing or changing the work hours, schedules, and layoff procedures of union employees is a mandatory subject of bargaining under federal labor law and is normally addressed by various provisions in a collective bargaining agreement that must be followed, unless the union agrees to modify these provisions.

The state application form and requirements for shared work programs should be reviewed to see what information and union agreements are needed when any impacted employees are represented by a union.

Q: Our union is complaining that we should be doing more for employees during this pandemic and telling us that all other employers are doing this and that. What can we do?

A: Every business is impacted differently during the COVID-19 pandemic and things change frequently. Employers need to do what makes sense for their organization and maintain good, consistent communication with their employees on things like maintaining safety and employment.